The yuan ended up against the dollar on Thursday but traded below the Chinese central bank's mid-point, as the market showed still decent dollar demand at the year-end. Spot yuan closed at 6.3635 versus the dollar, stronger than Wednesday's close of 6.3789. It has risen 3.55 percent so far this year and 7.27 percent since its depegging in June 2010.
Before trading began, the PBOC fixed the day's mid-point at 6.3353, up from Wednesday's 6.3482. The central bank uses the fixing to express the government's intention for the yuan's daily movement. Benchmark offshore one-year dollar/yuan non-deliverable forwards (NDFs) have largely been forecasting yuan depreciation in a year's time since late September, reversing a trend of appreciation since the yuan's revaluation in July 2005.
One-year NDFs were bid at 6.3850 on Thursday against 6.3770 at the close on Wednesday, implying that the yuan would depreciate 0.78 percent in 12 months from Thursday's PBOC mid-point, compared with a 0.45 percent fall implied on Wednesday.